Confessions of an Imperfect Saver #2

In 2016 I spent a lot on video games…

Before I became serious about getting my spending under control, I spent $1,980.20 on video games in one year. I should rephrase that; I spent at least $1,980.20 on video games. Not counting cash spent during that year, or charges at retail stores. I was only able to count transactions that directly referred to specific video games or video game platforms. Most of my spending was by way of micro transactions.

I pulled up all of our credit card and bank statements from 2016 and poured over each and every line. Each time I found a line that related to a video game, my stomach churned a little bit more. I found another line, another churn. I kept finding lines, and my stomach continued to churn. When all was said and done, I was embarrassed at myself for not keeping a lid on the spending.

What is crazy to me, was that most of that money wasn’t spent on new games or systems. Most of that money was spent on add-ons for video games I already owned! I was embarrassed to inform my wife what my findings were, she handled it with grace.

Addicted to Micro Transactions

Micro Transactions is a term that applies to small value financial transactions that happen within digital games and apps. These transactions are usually under about $10 and frequently involve the sale of in-app or in-game virtual good or digital content.

Most of the money I spent in 2016 would be considered a micro transaction. The average transaction I had was around $25. About 35% was spent on a “Free to Play” (F2P) game called League of Legends. I could have played that game without ever spending $1 on it. Instead I added to the nearly $1.8 Billion in revenue that “free” game generated in 2016.

The F2P industry is booming. In 2017, F2P games on the computer generated $22 Billion in revenue in 2017, not bad for a bunch of free games. That isn’t including mobile games, which grossed $37 Billion in-app purchases in 2017. For years I was a willing participant to the growing revenue stream.

I’m a Pecker

Me pecking away at my money in 2016.

Because of micro transactions, I was “nickel and diming” us, slowly pecking away at our money a little at a time. The rise of digital spending, and digital video games, means that with just a few clicks I could send $25 from my bank account and receive some shiny computer pixels in a game that I already owned.

There is no more barrier of having to drive to a store and hand your money to a person, no more feeling the “pain” or stress of handing over the money for something else. I was completely desensitized to feeling any remorse for a $25 charge that took 15 seconds to complete and provided instant gratification. With every $25 charge I could easily convince myself that I deserved whatever I was buying, I worked hard and $25 wasn’t much money anyway. Rinse and repeat for several months and I spent $2,000 without batting an eye.

What do I have to show for the $2,000?

Nothing.

I really don’t have anything to show for that money I spent. I didn’t grow closer to my friends and family as a result of that spending. My health didn’t improve (quite the opposite). The only thing I really got out of that money spent was some very expensive stress release and fun (sometimes). What I’ve discovered in the 2 years since, is that there are many more things I could do to relieve stress and have fun that cost way less money. At the same time, I can build stronger relationships with my family and friends. Even so, I haven’t eliminated games 100%. I play one mobile game and have cut my video game spending by 95%. Not perfect, but clearly an improvement from 2016.

Micro Transactions in the Real World

Eventually, I saw the how micro transactions occur away from digital spending. I started eliminating other micro transactions I found in my life. The Monster Vacation Fund was started as a way to eliminate my Monster Energy micro transaction. I used to go to Target over my lunch breaks and shop for clearance clothes that I really didn’t need. Recently, my wife and I discovered the grocery micro transactions that were occurring during the week. We stuck to our weekly grocery budget over the weekend, but made several quick trips for a couple of things during the week. Those small quick trips added up to hundreds of dollars each month. We are now cutting our middle week grocery trips and making due with what we have. Since making that adjustment 2 weeks ago, we haven’t missed the extra trips.

All of these small amounts of unplanned spending really add up. Since we eliminated some of the unnecessary spending, we have started a vacation fund and invested more in our retirement. Because we made these types of changes (among others), we have seen our retirement accounts triple since 2016 from $52,342.49 to $157,866.62.

Without correcting these mistakes, we would not be able to hit our $1M retirement account goal by 2030. We have 4,304 days until we reach our deadline, hopefully we continue to identify and correct the mistakes we will make along the way.